British regulators investigate Barclays CEO Staley over whistleblowing

The Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) will probe Barclays' boss after he attempted to identify the author of a letter raising concerns about a senior employee in 2016.

The bank made the information public while disclosing to the stock market that it had issued a formal reprimand and would impose a "very significant compensation adjustment" on Jes Staley.

Since the financial crisis, regulators everywhere have worked harder to encourage whistleblowers to come forward, with the FCA and the PRA introducing new rules in September previous year that required some regulated firms to appoint a senior manager to act as a "whistleblowers champion" and also to set in place formal arrangements on how to deal with whistleblowers in their organisation.

Trying to identify the complainant could violate US and United Kingdom laws protecting whistle-blowers and the Department of Financial Services in NY is also scrutinizing the case, the person said. A separate investigation by the board of Barclays has found that Staley made an error.

Staley, a veteran American banker who spent most of his career at JP Morgan and took the helm at Barclays in December 2015, has apologised to the Barclays board for his "errors".

His attempt to uncover the author came to light early this year.

The board concluded Staley "honestly, but mistakenly" believed that he was permitted to identify the author of the letter.

Mr Staley considered that the letters were an unfair personal attack on the senior employee, the bank said. However, that identification attempt was unsuccessful. The Board immediately instructed an external law firm to conduct an investigation and the Board promptly notified the FCA and PRA and other relevant authorities.

"I will cooperate fully with the Financial Conduct Authority and the Prudential Regulatory Authority, which are now both examining this matter", Staley said. The board also continues to review the position of other employees involved in this matter.

Since becoming CEO of Barclays in 2015, Staley has ignored calls to reduce the size of the bank, instead increasing business sales at the bank.

The bank said: "The board believes that its response to the matter should be proportionate to its serious nature".

Barclays shares rose 0.4% to 216.2p in early trading. "I will also accept whatever sanction it deems appropriate", Staley said in a statement. The former CEO, Bob Diamond, resigned in 2012 over the scandal and four former traders at the bank were sent to prison a year ago.

"I am personally very disappointed", Chairman John McFarlane said in a statement.

"The board takes Barclays' culture and the integrity of its controls extremely seriously".

In May 2015, Barclays was hit with a Dollars 2.4-billion (2.2-billion-euro) fine by United States and British regulators for manipulation of foreign exchange trading.

  • Joanne Flowers